Word on the street has been that Apple is preparing to launch its own Spotify/Pandora-killer in the near future, and a new report today fromBloomberg claims that the rumored internet radio service will launch in early 2013.

Apple has reportedly been in talks with many of the major music labels for quite some time, and deals will hopefully be reached by mid-November. The details of the upcoming service remain a mystery, but it looks like Apple isn’t settling for the status quo.

Apple Inc. and major music labels have intensified negotiations to start an advertising-supported Internet radio service by early next year, according to people with knowledge of the talks.

Talks are centered in part around how to share ad revenue and a deal could be reached by mid-November, with Apple starting a service within the first three months of 2013, said the people, who asked not to be named because discussions are still in progress.

“Executives from Vivendi SA’s Universal Music Group, Warner Music Group Corp., and Sony Corp.’s music division visited Apple’s headquarters in Cupertino, California, in recent weeks to learn more about its radio plans,” according to the report. Apple and the labels are trying to cut deals on sharing ad revenue. The iAd network will assumedly be involved.

The Wall Street Journal reported on Apple’s upcoming radio service last month, specifically mentioning similar services like Pandora and Spotify as possible targets. Apple’s “radio” idea sounds more like a music discovery service that’s meant to promote the iTunes Store. The radio service in question would assumedly be tied into iTunes and available across iOS devices.

According to unnamed sources, Apple wants “more flexibility about what listeners hear” than competitors like Pandora. For instance, instead of having a limited number 0f track skips, the listener would have no limit and would instead have to listen to an occasional ad. Apple also wants access to new music releases before anyone else, according to today’s report.

Pandora’s stock value has dropped more than 10% since this story broke.